Visitors to Plaza del Pasado in Old Town will most likely find the facility under new management in March. (K.C. Alfred / Union-Tribune)

Overview

Background: New York-based Delaware North took over the state contract to run the former Bazaar del Mundo in Old Town from longtime operator Diane Powers in 2005. But business in the renamed Plaza del Pasado has plummeted.

What's happening: Delaware North has a deal to turn over operation of the concession to restaurateur Chuck Ross. State officials are reviewing the deal, with a decision expected next month.

For hospitality company Delaware North, it's a case of winning the battle but losing the war.

After three lackluster years at the helm of Old Town State Park's largest concession, the New York-based company is in a tentative deal to hand over its contract to run the collection of retail stores and restaurants with an 1850s Old California theme.

Chuck Ross, owner of South Bay Fish and Grill in Chula Vista, is expected in March to assume operations of the Plaza del Pasado's dozen shops, as well as three restaurants within the park, under a new corporation called Old Town Family Hospitality.

The deal is under review by the state Department of General Services and the Attorney General's Office. A final decision is likely by mid-January, said Roy Stearns, a spokesman for the state Department of Parks and Recreation.

Delaware North never recovered financially after its successful bid against San Diego businesswoman Diane Powers for rights to the state contract on the former Bazaar del Mundo.

Powers, who was outbid by Delaware North on the contract in 2005, held the concession for 33 years. She has since relocated her Bazaar del Mundo shops just outside the park's borders.

A spokesman for Delaware North said Powers was offered the opportunity to take on the contract but declined. Powers could not be reached for comment.

State records show that under Delaware North, revenue at the establishments at Plaza del Pasado is down by almost 66 percent from fiscal year 2005, the last year that Powers ran the park's largest concession.

In fiscal 2008, Delaware booked revenue of $7.53 million, down 18 percent from the previous year.

In contrast, during an 11-month period that ended in May 2005, when the concession was transferred to Delaware North, Powers' Bazaar del Mundo generated $22.23 million in revenue.

In handing off its contract to Ross, Delaware North agreed to provide funds to guarantee capital improvements it pledged to make to get the contract, which expires in 2015.

The company will provide $6 million to finish the renovation of The Cosmopolitan Hotel and Restaurant, which is expected to reopen in 2010. And Delaware is also on the hook to pay the portion of the $2 million in monthly rent to the state that isn't covered by revenue brought in by the concession's shops and restaurants.

Ross said he is not paying Delaware North any money to take over the contract, but he declined to discuss details of the deal.

To win the original contract, Delaware North had pledged to spend $12 million on renovations and pay a minimum of $2 million annually or a percentage of its gross income, whichever is greater.